Judge orders redo of 'unreasonable' Yukon Water Board decision to deny permits to placer mine

A judge has ordered the Yukon Water Board to reconsider a land use approval and water licence application from a Dawson-area placer operation.

Yukon Supreme Court Deputy Justice Adele Kent, in a decision last month, wrote that the board's denial of Fellhawk Enterprises Ltd.'s application in 2022 was unreasonable and based on ungrounded speculation.  

The case marked the first time a court has conducted a judicial review of a land use approval decision, and one of a handful of times a water licence decision has been appealed. 

"We're happy with the outcome — we think it was the correct decision and we look forward to having the applications returned to the water board for reconsideration," Fellhawk's lawyer, Meagan Lang, said in an interview Thursday. 

"We think this court decision will help the water board, going forward, meet those standards of reasonableness and adequacy." 

Reasons 'not adequate'

Fellhawk filed its application to the Water Board in October 2021 with the aim of starting a placer mine in the North Henderson Creek area, about 67 kilometres of Dawson City. The applications covered 55 claims, 46 of which are held by another company, H.C. Mining Ltd., that Fellhawk has a usage agreement with. 

Fellhawk provided the agreement along with operation plans to the board, and also said in later correspondence that it would be operating at least eight kilometres away from H.C. Mining.

The board, in a four-page decision issued in July 2022, refused to give Fellhawk land use approval, citing concerns about the overlapping claims and the "real potential to cause issues with compliance and enforcement." 

While the board acknowledged that Fellhawk and H.C. had an agreement, its decision said the agreement "could change," or that H.C. "could rescind" it and "exercise its right to mine on the 46 grants."

It also wrote that Fellhawk did not provide "sufficient evidence" that its proposed use of water wouldn't significantly impact H.C.'s use of the same resource, 

Kent, in her decision, ruled that the board's denial of the land use approval was "not reasonable." She wrote that while the board "speculated" about what could happen with the overlapping claims and the agreement, it "gave no reasons why that speculation was possible or reasonable."

"This is in the face of a clear acknowledgement from both Fellhawk and H.C. that they would be operating separately and in the face of suggested mitigation approaches … It did not explain why those possible mitigation approaches would not work," she wrote. 

Similarly, she found the board's reasons for denying Fellhawk a water licence were "not adequate," noting that the board had again engaged in "speculation." 

"Speculation about what might happen in the future can be appropriate so long that as that speculation is accompanied by reasons why it is likely to occur, or even if it is less than likely to occur, why the risk that it could occur is significant," Kent wrote. 

"Here there is nothing."

Kent remitted both decisions back to the board for reconsideration. 

Board 'examining' how it drafts reasons

Jean Beckerton, the acting director of the Yukon Water Board Secretariat, said the board will not appeal the court's decision and is in the process of reconsidering Fellhawk's application. 

She also said the board will be "examining its approach in the drafting of its reasons for decisions to ensure that the reasons are clear, systematic and grounded in evidence" for future licensing proceedings.

While she acknowledged that the judge found the board's reasons for denying Fellhawk's application weren't adequate, Beckerton pointed to another part of Kent's decision, which found that the Water Board's process, overall, "seems to be working" and that its "decisions are valued." 

Lang, the lawyer representing Fellhawk, said the company is "back to square one" and still can't do any work unless the Water Board gives it land use approval and a water licence. 

"Water board decisions have direct impacts on livelihoods and industry, so it's important that the water board gives the care and attention needed to facilitate healthy industry while upholding environmental values," she said.

"Ideally, we wouldn't be, you know, having a judge explaining what types of decisions are reasonable or not. Our hope is that going forward, decisions will meet that standard and we won't need judges to be giving decisions to help give that guidance."